ISLAMABAD: The lack of prior consultations with key allied parties in the federal government, compelled the cabinet to postpone the approval of the Finance (Supplementary) Bill, 2021 and the State Bank of Pakistan (Amendment) Bill, 2021, it is learnt.

A cabinet member and ally of the government, on condition of anonymity told Business Recorder that the government made a commitment on Tuesday that Federal Minister for Finance and Revenue Shaukat Tarin would give detailed briefing to the cabinet on both bills in the next meeting before their passage.

The cabinet member further revealed that both the important bills are not even shared with the allies’ parties in the government. “We asked for the copies of the bills, which were not yet shared. How can we comment, pass or reject it, if we have not even seen or studied it. We are answerable to leaderships/ parties, as well as, to the public,” the minister added.

Responding to another question, the minister said that the cabinet meeting has not been scheduled as yet.

“It is likely to be held on Wednesday or Thursday”, he added.

Joint session: Pakistan approves central bank bill

Responding to another question, the minister said that no doubt the finance (supplementary) bill would have an inflationary impact, but at the same time, these are needed for the sixth review of the $6 billion Extended Fund Facility (EFF) to get cleared by the International Monetary Fund (IMF)’s executive board on January 12, paving the way for the disbursement of about $1 billion tranche. The government would introduce the Finance (Supplementary) Bill, 2021 and the State Bank of Pakistan (Amendment) Bill, 2021 in the parliament for approval after getting it passed from the cabinet.

The government has committed to the IMF that Pakistan will complete all ‘prior actions’ before the board of directors meeting to approve the revival of $6bn EFF.

Under those prior actions, the government, through the supplementary finance bill will, effect a net fiscal adjustment of almost Rs550 billion during the remaining part of the current fiscal year through a 22 per cent cut in development funds, about Rs360 billion worth of withdrawal of tax exemptions with a revised tax target of Rs6.1 trillion and increase in petroleum levy on major petroleum products by Rs4 per litre per month.

Copyright Business Recorder, 2021